Supply Chain Case Study: HP And United Parcel Service

712 Words 3 Pages
1. Since the high-value IT products only had a short life cycle, HP needed to satisfy every customer and meet the various requirements and needs quickly and efficiently, but supply chain was not their major capabilities. As a result, HP developed a partnership with United Parcel Service (UPS) to co-create customer values by outsourcing the supply chain to UPS. UPS acted as a logistics supplier that not only had desired capabilities, but also provided a varied range of transportation alternatives that helped to deal with the changing international complexities and enable HP to create and capture new marketing opportunities.
2. HP was the largest global IT companies in the world with millions of customers. It had the strategy of offering hi-tech
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HP and UPS had structuring tools by setting up a combined performance metrics to measure both the financial and service-oriented targets to see the success of their partnership. A financial metric was made for measuring the performance of partners, adjusting volume fluctuations, and guiding the behavior towards the highest goal of the partnership: reducing the overall spends by 12 per cent for HP. Furthermore, the company decided to use unit based cost in the measurement. The service level agreement (SLAs) served as a core mechanism in managing the partnership and facilitating improvements and innovations. When the partnership became mature, both of the two companies had to develop new standards for evaluating the effectiveness of the partnership and other improvements than using the one that exist …show more content…
The three core business objectives were indeed essential and significant in keeping the leader position of UPS in the industry. To implement the first objective, the company had to decrease the business process heterogeneity that prevents the reuse of application codes between different relationships. UPS could do some researches on the customers to find the most general or the average purchasing habits. They could develop adaptable infrastructure that suitable for most of the customer’s diverse needs, thereby eliminating the process heterogeneity and meet the customer expectations. To implement the second objective, the company had to reduce the subunit orientations by making sure that every employee have a basic overview about the company’s operations and goals, increasing the personnel’s awareness of seeing themselves as a part of the entire company instead of distinct departments. To implement the third objective, UPS really need to build trust with customers by encouraging the customers to give feedback on their services. While partnering with HP, UPS could ask HP to get the customer review on the delivery services as well as the HP products. By doing so, UPS could gain more information about the service and addressing the customer’s requirements more

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